A brokers perspective...MMR

amnblog

Why should they need to account for the extreme ends of the spectrum for the new rules.

ACG

I was asking would you feed your family on £250?

I agree it can be done. It could be done on £50 probably but your diet would be baked beans and cereal.

Realistically you can feed them on as little or as much as you like, but my point is are you feeding them on £250 or are you saying you can feed them on £250 - the difference is what you can do and what you are doing.

When i first started living on my own, i was spending about £70-80 a week on food because i was living on take aways. Now i live with my gf i cook and i spend maybe £50 a week on food for the 2 of us and to be honest have probably never ate healthier than i do now.

In the main it is going to be down to figures from the ONS, this is why its important to check with the lenders or a broker BEFORE applying. Applying and then getting a shortfall is a waste of time and potentially money.

amnblog

ACG wrote: »

its important to check with the lenders or a broker BEFORE applying. Applying and then getting a shortfall is a waste of time and potentially money.

If you (as the customer) check with a Lender and get a shortfall what do you do? Check with another Lender?

This is why I believe brokers should increasingly become the more dominant channel for mortgage applications.

Leon_W

I know what'll happen Firewyrm. If your figures are lower than ONS statistics they'll use ONS ones and if your figures are higher they'll use those and mix what suits them best.


In the real world it is very unlikely that a borrower will maintain "affordability" throughout a whole 25 year mortgage term and may well end up mortgage prisoners. A couple of first time buyers I saw last week both good salaries and affordable mortgage but the way life goes it's probable that they'll have children, she might not go back to work therefore mortgage "unaffordable" even though they might be quite happily paying it on one salary.


It's a ruse. Give em "affordable" mortgages and then trap them on the SVR when it is deemed to be "unaffordable". The lender that traps the most borrowers wins.

amnblog

Leon_W wrote: »

It's a ruse. Give em "affordable" mortgages and then trap them on the SVR when it is deemed to be "unaffordable". The lender that traps the most borrowers wins.

Unfortunately Leon, I suspect that may have been the idea from day one of MMR.

Let_Us_See

I'm with amnblog on this. You cannot expect a lender to carefully study each applicant's existing financial commitments to the last penny. The mortgage processing system would grind to a complete halt - its not far from that now! Therefore, to save cost and time, lenders will utilise available family cost models etc. to assess affordability, and these figures may differ from applicant's actuals. If affordability is tight then use an experienced broker to do the legwork as lender's affordability models differ widely.

amnblog

Let_Us_See wrote: »

I'm with amnblog on this. You cannot expect a lender to carefully study each applicant's existing financial commitments to the last penny.

To be fair Kensington are asking clients how much they spend each month on grooming.

.and I thought it was illegal.

FireWyrm

ACG wrote: »

I was asking would you feed your family on £250?

I agree it can be done. It could be done on £50 probably but your diet would be baked beans and cereal.

Realistically you can feed them on as little or as much as you like, but my point is are you feeding them on £250 or are you saying you can feed them on £250 - the difference is what you can do and what you are doing.

I can and DO feed us on £250 a month. I *could* do it for £150 and no, we dont live on baked beans and rubbish. Actually, I only buy fresh meat, fish and vegetables and £250 a month is more than enough - believe me.

Your skepticism illustrates my point perfectly. You clearly do not understand how I can do what I do, despite my assertion that I can and can prove it. If your skepticism is an indication of what the banks are doing as well, then we have some very big problems ahead of us all. Since the computer rather than a sensible person is the final arbiter of lending decisions these days, then how much flexibility is there in the criteria for those who do not fit the 'average' profile? Worse yet, a human may be able to override the computer in this case, but even they dont believe the figures being given. I am really asking, what are the national assumptions being used for the MMR and how they will impact on lending decisions.

ACG wrote: »

In the main it is going to be down to figures from the ONS, this is why its important to check with the lenders or a broker BEFORE applying. Applying and then getting a shortfall is a waste of time and potentially money.

Indeed. So, how do you find out what the lending criteria is likely to be, since most institutions will have entirely different sets of assumptions, one would expect. So, for instance, I apply to Halifax who tell me to bog off because their computer overrides my real spending figures with fantasy ones from ONS but HSBC are a little more sensible and take actual figures rather than fantasy ones. That is fine, but there has to be some sort of regulation and rationalisation of the criteria's....otherwise, you end up chasing your tail going from one lender to the other trying to fit someone's model to your real life.

amnblog

FireWyrm wrote: »

....otherwise, you end up chasing your tail going from one lender to the other trying to fit someone's model to your real life.

That is where brokers come in.

FireWyrm

amnblog wrote: »

Unfortunately Leon, I suspect that may have been the idea from day one of MMR.

The more I read on this, the less like a good idea it looks. On the face of it, MMR makes perfect sense and would appeal to the majority of self-satisfied individuals who regularly post on public news sites regarding people who had self-cert mortgages. Of course, they were abused, absolutely, but not everyone did and self-cert mortgages serve a very good purpose if used correctly. There will be a minority of idiots who overreach and yes, they may well lose their house if the interest rates go up, but this new MMR seems like a whole unnecessary layer of complexity to achieve very little in the long run, except more inconvenience for sensible consumers....much like AML regulation.